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Report to Steering Group Meeting - 9th March '99
Item 5 - Business case

Item 5 - Business case

1. Aims

1.1 To consolidate our previous decisions on this issue and to outline current reasons for incorporating a company to manage the extranet and act as a service provider.

1.2 To outline the services that such a body could offer.

1.3 To outline the actions needed to create such a body

2. Recommendations

2.1 That we agree in principle to register Newham.net

2.2 That we seek legal advice on the appropriate constitution

2.3 That the Steering Group agree who to invite to establish this organisation and consider the option of creating it solely around the Brassett Point Network in the first instance.

2.4 That a business plan is developed

2.5 That we seek commitment from proposed partners

2.6 That we put in hand securing an IP allocation

3. Background decisions

3.1 Partnership Meeting Decisions

3.1.1 In April '98, at the Steering Group's recommendation, it was agreed in principle that Newham Online should seek to become an Internet Service Provider and Independent Service Provider and that its aims in doing this should be:-

3.1.2 To develop a broad band based extranet (virtual private network) that will support information provision, communication, collaboration and commerce.

3.1.3 To provide access that is free at the point of use to its broadband network to local people in their homes, workplace and public spaces in order to achieve maximum participation.

3.1.4 To develop online services based on the network so as to make profits that can be used to enhance the local communications infrastructure and to promote the take up of information and communication technologies by local businesses and residents.

3.1.5 The Steering Group was empowered to take this decision forward through further investigation of the practicalities and negotiation with key players

3.2 Action since Partnership decision

3.2.1 Subsequently the Steering Group has approved the purchasing of the newham.co.uk domain and noted informal discussions held with Oftel regarding the deployment of DSL however no steps to implement the setting up of a company have yet been taken it being thought best to wait for the network audit to be completed and the main partners to have formally agreed to a strategy.

4. Current considerations

4.1 Network audit

4.4.1 Network GIS - Thanks to Marconi we now have a complete network model of the various WANs in Newham which provides a basic tool necessary for the development of the extranet. Marconi has agreed to maintain this database providing network managers continue to provide the necessary information.

4.4.2 Growth. There will be a great increase in local connectivity over the next two years, key elements of which being the connecting of all local schools and the rolling out of NHSNet. A Newham extranet of 13,000 networked computers providing access to 73,000 people is readily achievable on the basis of existing expenditure plans. There are considerable opportunities for increased efficiency, savings and enhanced services.

4.4.3 Extranet creation. It seems highly probable that the major WANs will all be linked by June '99.

4.4.4 Applications. A range of extranet applications have been identified including a Newham Learning Grid, Newham Creative Network, Online commerce, Council services, Newham Health Network, Newham Young People Online and the Newham Millennial Celebrations. Telephony over IP should also be investigated.

4.2 LBN infrastructure support

4.2.1 The Council is happy to link to WANs owned by Newham Online partners. The first to be linked the Health Trust and the next is likely to be Newham College of FE. These links are quite expensive to install, as LBN will use a Checkpoint Firewall at £12,000 on its side of the link. Tunnelling can be provided across the Council's ATM network to the switch at Bridge Road depot from where the Teleregion, Council and other linked networks can be seen. It is also OK in principle to link LANs directly to the network through router connections to the main switch at an equipment cost of around 1,000 pounds. This was fine from the point of view of security but there were issues with respect to bandwidth demands and IP addressing that would need to be addressed whenever this was considered.

4.2.2 If connectivity to an organisation would facilitate public access to Council information then the Council could consider contributing to the cost of the connection. In other circumstances the full cost of the connection would need to be met by the organisation.

4.2.3 The Council is happy to house servers for Newham Online in its server farm at Bridge Road depot where connection will be made via a port on the main switch linking the Council networks to the Teleregion and other WANs.

4.3 Domains & IP addresses

4.3.1 Newham Online members now hold newham.net, newham.co.uk, newham.ac.uk, newham.gov.uk and newham.org.uk domains which is all that is required for a cross sector partnership of the academic, voluntary, public and private sectors. Newham Council is seeking to register newham.net.uk so as to avoid anyone else obtaining this.

4.3.2 In order to be independent of other ISP's it is necessary to obtain a block of IP addresses that is equivalent to 32 Class Cs. It is likely that this could be achieved for around £5,000. This is essential as it means that Internet Access can be bought from various sources but IP numbers do not have to change. This arrangement is essential for the development of an extranet where security will rely heavily on IP numbers. It is also the case that DSL links will require fixed IP addresses unlike dial up connectivity.

4.4 Other support

4.4.1 Marconi is prepared to assist with network consultancy, network design and definition, business case development, usability analysis and project management.

4.4.2 Teleregion is providing matching funding for extension of the extranet to two business centres. It is also providing free Internet access to these centres and, of course, connectivity to other Teleregion linked sites.

4.4.3 ERDF. Bids have been submitted for three projects that would help extend the extranet and the services it offers.

4.4.4 Computer Access.is providing servers and mailing lists.

4.4.5 Internet Vision is a partner in one of the ERDF bids and is advising on how we could become an ISP.

4.5 DSL and dial up

4.5.1 Oftel protection is only available to telecommunications companies that trade for a profit. If such a company existed locally it would be entitled to connect to BT's network at cost. This would cut both the costs and risks of deploying DSL and may make provision of "free" dial up Internet access feasible locally.

4.6 Brassett Point Network

4.6.1 The main driver for needing to create the new company sooner rather than later is the BPN. This is funded and is expected to be installed before the end of March. It is a £51,000 project that will prove a 155M IR link to the top of Brassett Point and 10M microwave links to St. Luke's in Canning Town and UEL's Duncan House.

4.6.2 The BPN was originally going to be purchased through the Council but this became impossible as a result of Legal opinion that the Council could not provide a communications infrastructure of this type. As a result the purchase is being made by St. Luke's Project Ltd which is a wholly owned subsidiary of a charity. The infrastructure will be jointly owned by the charity, UeL and Go2Find. This situation is very far from ideal and will make upgrading the system very difficult, as it would need to be agreed by the joint owners. It would make a lot more sense if this equipment was owned or at least managed by a company set up for the purpose.

5. The services

5.1 Not re-inventing the wheel

5.1.1 UKERNA runs the Janet network that links 150 Higher Education and 200 Further Education establishments. This is obviously a lot bigger than what is being proposed in Newham but there is no reason to think that its network management and service functions should be different.

5.1.2 Similarly the London Internet Exchange (LINX) provides a model for peering arrangements between bodies that have their own internet connectivity and allow free incoming traffic between peered networks.

5.1.3 However neither of these provide a complete model of what is required as neither is responsible for developing networks by connecting homes and SMEs. Kingston Communications can be used as the model for this.

5.1.4 Finally there is the need to develop and manage the Gateway site. There are many models for this from public, private and voluntary sectors.

5.2 Suggested activities

5.2.1 Extranet management - oversee bandwidth utilisation, Internet use and general performance. Manage process of connecting organisations and businesses using DSL and other technologies. Ensure that infrastructure is insured.

5.2.2 Extranet maintenance - Maintain or place maintenance contracts for key parts of the extranet infrastructure. Administer agreed at risk periods for maintenance.

5.2.3 Extranet development - Assist owners of existing WANs to extend them and develop a commonly owned infrastructure.

5.2.4 Customer IP services - Manage primary and secondary DNS for newham.net, newham.org.uk and newham.co.uk. Offer DNS services to local businesses and organisations

5.2.5 Peering - Oversee peering agreements between WANs

5.2.6 Secure Internet access from a variety of sources and resell thereby providing service redundancy

5.2.7 Implement a caching strategy to minimise wasted Internet bandwidth

5.2.8 Provide dial up access.

5.2.9 Provide mail services including receipt confirmation, screening of junk mail and secure mail.

5.2.10 Manage servers that provide public Internet services either directly or in partnership. Run audio, chat, commerce, database, list, mail, news, video and web servers. Provide videoconferencing service.

5.2.11 Manage an eMail directory service

5.2.12 Manage application development and hold IPR where appropriate.

5.2.13 Hold software licences

5.2.14 Provide network security services including incident reporting, managing firewalls and emergency response.

5.2.15 Manage the Newham Gateway site

5.2.16 Provide identity & authentication services

5.2.17 Manage PICs ratings within extranet

5.2.18 Hold licences & IPR for use of content

5.2.19 Provide feedback to content providers

5.2.20 Secure cheap telephony and explore voice over IP.

5.2.21 Provide technical support and advice

5.2.22 Produce documentation and best practice guides.

5.2.23 Run workshops and conferences

5.2.24 Support technical user groups.

6. Next steps

6.1 Registering newham.net

6.1.1 As newham.net is our registered domain it would be appropriate to register it as a company.

6.2 Legal advice on constitution

6.2.1 It should be possible to use this paper and some basic research into the legal structures of UKERNA, Linx and Kingston Communications to achieve a brief for consideration by solicitors. The intention is that the company should fulfil Oftel's definition of a telecommunications company whilst not being susceptible to take-over. It will have to trade for profit but it should be built in that a substantial portion of the profit should be allocated for reinvestment in the infrastructure and to encourage local use of ICTs. The company will also have to work in the mutual interests of its owners. It may well be that a co-operative structure is the most appropriate.

6.2.2 It is suggested the Rowe and Maw be approached to advise on this. They are already working on the Bull/LBN New Deal project and have considerable experience in this field.

6.3 Proposed partners

6.3.1 It is obvious that all owners of WANs that are linked to form the core of the extranet should be partners. These are Newham Council, the University of East London, Newham College of Further Education and Newham Community Health Trust.

6.3.2 As Aston Charities Trust is the owner of newham.net and newham.org.uk it should also be a partner. Computer Access owns the lists and servers used by Newham Online and is moving into Newham so it may be appropriate for it to also be considered.

6.3.3 As a result of the problems in the development of the Brassett Point network two other organisations now own a key part of the extranet infrastructure these are the Custom House and Canning Town Community Renewal Project and Go2Find. The first is a registered charity and the latter a private company supporting the Newham Online supported Slipway Project

6.3.4 If all the above were accepted as partners there would be two public bodies, two academic bodies, three charities (one of which is a community enterprise) and one private sector company involved. Given our cross sector principles this is a fair cross section though the private sector is under represented.

6.3.5 In order to keep a strong link between newham.net and Newham Online it is suggested that the Director of Newham Online act as Company Secretary of Newham.net

6.4 Business plan

6.4.1 A business plan based on the proposed activities needs to be prepared. It is suggested that Richard Stubbs and Nigel Worthington develop this. It is also suggested that Internet Vision and Poptel are consulted in the production of this plan and that Regeneration and Partnerships are asked to advise whether any finance would be available.

6.4.2 In order to get things moving as fast as possible it may be considered appropriate to simply do this for the Brassett Point Network in the first instance.

6.4 Getting Commitment

6.4.1 It will probably be necessary for the company to be started with a financial contribution from each partner. This would provide a useful test of commitment to working for mutual benefit and would ensure that the commitment had to be made formally. It would also provide the organisation with the basic finance it would need to exist.